Business Environment

Estonia is situated in North-Eastern Europe, on the eastern coast of the Baltic Sea. To the north it is bordered by the Gulf of Finland, to the west by the Baltic Sea, to the east by Russia and to the south by Latvia. The shortest route from Russia by sea to China and also to Western Europe and North America is through the Baltic States.

Government policy

Successive governments have adhered to the principles of Estonia’s economic success: a balanced state budget, a stable convertible currency pegged to the euro and liberal trade and investment laws.

Tax system

The tax system of Estonia includes a broad tax base and relatively low tax rates. No corporate income tax is charged on undistributed profits. There has never been any transit tax in Estonia.

Telecommunication

Significant developments have taken place in Estonia in terms of telecommunication infrastructure, leading Estonia to be one of the most advanced of the CEE countries.

The share of Internet-users is already high in relation to the population of Estonia and in comparison to other EU countries. Estonia leads the way among the Baltic States in Internet usage and today some 60% of the population uses the Internet.

Internet banking services have experienced rapid growth and are considered among the most advanced in technological sense. Internet banking has become a common channel through which a citizen performs cash transfers, pays taxes, pays for services, communicates with the tax board, etc. According to AC Nielseni, an Estonian market research company, Estonia ranks No. 1 in the world in using Internet banking. The research showed that 80% of bank customers use Internet banking at least once a week.

E-Tax Board has been introduced with the aim of providing an opportunity to fill out tax statements via the Internet, with pre-filling of formulas by respective institutions. The most advanced mobile parking project has been successfully implemented in major Estonian cities, where mobile phones are used for paying for parking.